Voices from the Arab press: The path toward a unified Gulf currency

A weekly selection of opinions and analyses from the Arab media around the world

 Displaying data at the Doha Stock Exchange in Qatar, January 2021 (photo credit: REUTERS/IBRAHEEM AL OMARI)
Displaying data at the Doha Stock Exchange in Qatar, January 2021
(photo credit: REUTERS/IBRAHEEM AL OMARI)

Al-Ittihad, UAE, December 24

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Over the past 40 years, Gulf Cooperation Council countries have made important progress on many economic fronts, such as the removal of taxes and duties on national products, the harmonization of tariffs, reciprocal work permit agreements, and electrical and railway connectivity. 

However, what has still not been achieved is the single most important endeavor: adopting a unified currency for all Gulf states. Of course, currency unification is one of the most difficult stages of economic unity. In the European Union, the single currency was adopted only after years and years of groundwork. Indeed, adopting a single currency is the most complex aspect of cooperation due to the complexity of monetary policies and their significant effects on the overall financial conditions of each member state. 

Like with any unified currency, the process of issuing the Gulf currency faces several obstacles, although it is the currency that has the most chances for success thanks to the existing economic infrastructure shared between its potential member states (with the exception of Kuwait, whose currency is pegged to the US dollar).

The most pressing issue is the need to set up a Gulf central bank, which would enjoy full autonomy and would be protected from any political interference of a single member state. It would have a chairman and board of directors that would be professionally elected and have full power to draw up the bank’s monetary policies in line with its vision for the Gulf’s economy. 

Foreign ministers of the Gulf Cooperation Council (GCC) arrive, ahead of an annual leaders' summit in Riyadh, Saudi Arabia, December 9, 2019. (credit: SAUDI PRESS AGENCY/HANDOUT VIA REUTERS)Foreign ministers of the Gulf Cooperation Council (GCC) arrive, ahead of an annual leaders' summit in Riyadh, Saudi Arabia, December 9, 2019. (credit: SAUDI PRESS AGENCY/HANDOUT VIA REUTERS)

There are no de facto monetary policies in the GCC states at the present time since all of them follow the monetary policies of the US dollar by virtue of their association with it; the unified currency, if agreed upon, must initially be pegged to the dollar, as well. This is especially true since, after 40 years of taking orders from the US Federal Reserve, GCC states will need to develop greater competency and expertise in devising their own monetary policy.

After launching the single currency and ensuring its stability, GCC states would have to undertake extensive legislative groundwork in an effort to ultimately break the peg from the US dollar. This will be done while ensuring the complete sovereignty of the Gulf Central Bank. 

None of these steps are easy, but they may very well prove rewarding for the Gulf region

– Mohammed Al-Asoumi

It Turns Out Some Colors Are ‘Haram’ in Kuwait

Al Qabas, Kuwait, December 22

I recently heard a story of a children’s toy store in Kuwait that was forced to take some of its products off the shelf because the colors of those products resembled the rainbow flag, associated with the gay community. When the store owner came to release the products from customs, the officer on duty refused to cooperate, claiming that these products were “illegal in the country.”

The store owner didn’t back down and explained that they are manufactured by an international brand and sold all over the world. The officer refused and claimed that they are “associated with the worshipers of Satan.”

“Was this ban issued by the Commerce Ministry,” the owner asked, to which the officer responded, “No.” What this anecdotal experience teaches us is that some decisions in our country are taken by people in a position of power based on their own personal convictions, worldviews, and beliefs – without any legal backing. 

Unfortunately, after such decisions are made on an arbitrary and ad-hoc basis, they often become a norm that is blindly applied to everyone. 

A question to the Commerce Ministry: If one of the employees of the ministry wakes up one morning and decides that the beautiful blue color, which is one of our symbolic national colors, is actually a color associated with donkey lovers – will our national football team be prohibited from wearing its blue uniform?

Will Kuwait Airways, our national carrier that adorns its fleet with an iconic blue livery, be prevented from flying in our airspace? Alternatively, if one of the geniuses in the relevant ministry discovers that green or yellow has been used as a color associated with atheists in another country, will the Al-Qadsiah Football Club burn their shirts and dispose of them?

The truth is that we must not allow employees, bureaucrats, or anyone in a position of power to make decisions for all of us according to their own whims and desires.

Unfortunately, the phenomenon of issuing public decisions based on the conviction and temperament of a single official, and imposing it upon the people, has become all too common.

Ultimately, it is up to us to reject these decisions and defy them, unless they’ve been carefully evaluated by the appropriate ministries and enshrined in law that is binding on all citizens.

– Iqbal Al-Ahmad 

The Iranian Nuclear File: Will 2022 Usher in an Agreement or War?

Al-Masry Al-Youm, Egypt, December 23

Only a handful of days are left in the year and soon we will be welcoming in 2022. With the advent of the new year, the international community will be bequeathed a handful of crises that must be dealt with to prevent war and conflict.

Perhaps the biggest of these issues is the Iranian crisis, which appears on the surface to revolve around the question of whether Iran will agree to return to the 2015 nuclear agreement and stop the development of nuclear weapons in exchange for the lifting of sanctions. 

But the truth is that the equation has become far more complex. It’s no longer about former US president Donald Trump’s mistake to withdraw from the agreement, nor is it about President Joe Biden’s insistence on returning to it. The thing is, the whole crisis has changed a lot and no one can simply erase the past four years and pretend they never happened. 

On the American side, Washington lost its credibility to honor international agreements, and no one can knowingly guarantee that a new president won’t revoke the next agreement reached with Iran. And on the Iranian side, the American policy of “maximum pressure,” the cyber-military proxy wars carried out by Israel and the onset of COVID-19 pushed the Iranian public to the right and led to the rise of a hawkish new government.

And the mullah regime hasn’t sat idly by waiting for America to come back to the negotiation table; they took advantage of the opportunity to enhance Iran’s strategic involvement in neighboring countries like Iraq, Lebanon, Syria, and Yemen.

Much water has passed under the bridge in the past four years and changes also took place outside of the United States and Iran. The international system also changed, with the rise of China on the one hand, and the Russian audacity on the other hand. What is certain is that both countries, China and Russia, have no interest in adding a new nuclear state to the list of global powers. But at the same time, they know very well that this system has already been violated by India, Pakistan and Israel, alongside other countries that have enough breakthrough capability to become nuclear powers themselves, such as North Korea, Japan and perhaps Taiwan and South Korea as well. 

The US and Iran will continue to test each other’s limits. Iran is applying pressure on the US by supporting Washington’s opponents ranging all the way from Venezuela in the Western Hemisphere to Hamas, Hezbollah and the Houthis in the Middle East, to signing wide-ranging treaties with China. 

The United States, for its part, is pressuring Iran through Israel, which insists on leaving the military option against Iran on the table. Unfortunately, there is little room for error. If Tehran feels like the military option is truly a possibility, it may seek to take matters into its own hands before Israel prematurely destroys its nuclear reactors like it has done in Iraq and Syria in the past.

The biggest hope for negotiations to succeed is the economic and political conditions that have impacted Iran in the past few years, in large part due to the pandemic. Biden is in dire need of success, while the Iranian regime is in a state of political and economic exhaustion. In this regard, reaching an agreement would be a huge win for both sides.

– Abd Al-Moneim Said 

The Fall of the Turkish Lira and Steadfastness of the Egyptian Pound

An-Nahar, Lebanon, December 20

The people of Egypt haven’t forgotten how members of the Muslim Brotherhood practiced what they believed to be jihad, armed themselves, pursued political tricks and games, committed crimes and targeted their media platforms for a long time to win the battle to bring down the Egyptian pound and devalue it in the face of other currencies.

After the Egyptian people’s revolution against the rule of the Brotherhood, surviving members of the organization did everything in their power to further devalue the Egyptian pound and rob the Egyptian people of their money.

Many took out large sums of cash in US dollars in order to limit its circulation in the Egyptian market, to smuggle it, or to resell it at home at exorbitant rates. They seized every citizen who wanted to buy an apartment, car or plot of land and tempted him to buy US dollars at a price that far exceeds the exchange rate.

When the Egyptian government decided to float the pound and put it freely in banks, the Brotherhood was immediately injured. Shocked, they quickly changed their plans, hoping to find other ways to topple the regime and restore their own control over Egypt.

But the Egyptian pound has held and the Brotherhood hasn’t returned to the presidential palace. They’ve taken their crisis elsewhere, to Turkey, where the local currency entered an unprecedented free-fall. 

In the name of religion, the Brotherhood is now busy begging people for donations that would help the Turkish economy. How hypocritical that just a few months ago, Muslim Brotherhood members did everything they could to sabotage their country’s very own currency and then celebrated the downfall of the Egyptian pound.

Now, they’re grieved by the collapse of the Turkish lira. But the good news is that, despite the Brotherhood’s best efforts, the US dollar is back in full circulation in the Egyptian economy, which is quickly recovering.

Meanwhile, the Brotherhood’s efforts to salvage the Turkish lira are yielding no result.

– Mohamed Salah